MSI Press Blog

  Understanding royalties is one of the most important—and most misunderstood—parts of publishing. The numbers look simple on paper, but the basis on which they’re calculated can dramatically change what an author actually earns. Below is a clear, practical overview of what’s typical, what’s fair, and how to protect yourself from the “hidden math” of net‑based royalties. 1. The Two Royalty Models: List vs. Net Royalties on List (Cover Price, MSRP) Calculated on the book’s full retail price Transparent and predictable Example: 10% of a $20 hardcover = $2 per copy Royalties on Net (Net Receipts) Calculated on what the publisher actually receives after retailer discounts and other deductions Retailer discounts are typically 40–55% A “10% royalty” on net often yields far less than a “10% royalty” on list “Net” may include deductions such as freight, warehousing, marketing fees, and returns Which Is Better? List‑based royalties are almost always better for authors Ne...

  Authors frequently confuse LIST and NET and, in this way, end up with contracts that pay lower royalties when they believe that they are getting a good deal. Often, they cannot negotiate in ways that benefit themselves because they do not understand this difference and its significance. Let's break this down. List refers to the retail price of the book. Payment on list means a percentage of the retail price of the book. If royalties are 8% of list (5-8% is typical), then on a $10 book, royalties would be 80 cents; if they are 10%, royalties are $1, on every book sold. Easy to calculate, easy to predict income, and always standardized, no surprises or overestimations. Net refers to what is leftover after expenses. Gross revenue gets adjusted by a number of expenses: printing costs, printer set-up fees, shipping costs, handling fees, distributor percentage of sales (typically, 40%-55% per book), distributors' initial and continuing catalogue listing costs (without which online ...

It is Tuesday. Monday's madness is over, and Wednesday will take us over the hump, so Tuesday it is--for some serious discussion with authors. Tuesday talks mean to address authors in waiting and self-published authors who would like to go a more traditional route or who would at least like to take their steps with a publisher by their side.   Since today is Tax Day, it seems like an appropriate time to explain how royalties and taxes are intertwined. Some authors become quite confused. Well, it is confusing because of the multiple years involved in royalty statements, payments, 1099s, and tax filings. Here is a visual that might help.   Books sold Royalties paid MSI sends 1099 to IRS and author Authors report royalties on 1040 (and to state) 2023 2024 2025 (January) 2025 (April) 2024 2025 2026 (January) 2026 (April) 2025 2026 ...